Introducing the Reward Management System - CIPD

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16 Reward Management Table 1.1 Orientations towards the workforce: reward management implications Interpretation Issues Reward management agenda Employees are valuable objects, but devoid of feeling, which are operated by the owner or agent for maximum utility. Employees are ‘debts’ for which one is liable, or troublesome responsibilities, and therefore need to be limited, assiduously policed or expunged. Employees are independent beings; they exercise choices based on logic and emotion. They will offer loyalty to a supplier of employment/ reward if they believe the promise and see results. Employees are independent beings; they exercise choices based on logic and emotion. They will offer commitment to organisational partners if they believe in them and see results in the substance and process of the effort–reward bargain. Source: adapted from Perkins (2000) ‘Employees are “our greatest asset” . . . they need to be used effectively’ How do we source compliant objects? How do we keep them in prime shape to do our bidding? Pump-priming, instrumental relationship. ‘Employees are a liability . . . they need to be controlled’ How do we minimise our debts? How do we keep them under close surveillance? Wary, possibly antagonistic relationship. ‘Employees are “customers” . . . understand and serve them’ What customers do we want? What can we (afford to) supply? What are the alternatives? Active supplier role to continuously renew an employee-centred relationship. ‘Employees are “corporate allies” . . . develop a mutual success agenda’ What allies do we need and desire? What can we (afford to) trade? What are the alternatives? Active partner role to continuously renew a mutually profitable employment relationship. Buy on contingency terms. Service regularly (by service agent?). Run to breakdown: refurbish or write off and replace. Utility (exploitative) orientation? Minimise cost of debt. Arm’s-length relations. Ensure ability to write off liability at earliest opportunity. Resigned-utility orientation? Understand customer preferences. Honest and transparent response with specification available. Regular client relationship review. Service orientation? Understand allies’ needs and priorities. Honest and transparent response: accommodation available? Regular alliance relationship dialogue. Reciprocal commitment orientation? A free sample chapter from Reward Management, 2 nd Edition by Stephen J Perkins and Geoff White Published by the CIPD. Copyright © CIPD 2011 All rights reserved; no part of this excerpt may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency. If you would like to purchase this book please visit www.cipd.co.uk/bookstore.
Introducing the Reward Management System 17 follows the conceptual thread that if people really do represent ‘our greatest assets’, the consequence is that the employer needs to find ways of selling an employment brand, implying that employees hold the upper hand in the transaction. A fourth orientation towards the workforce signals that although the employer recognises the latent value in people who may be persuaded to work for the organisation – still carrying a risk that the relationship may become employee-dependent (see eg Pfeffer and Salancik, 2003) – both parties have choices open to them. A mixture of economic and socio-psychological factors may condition the choices. Rather than risk extrinsic or intrinsic contractual promises the rhetoric of which may fall short of the reality owing to unplanned circumstances – for example, changes in investment or trading conditions that might undermine the ability to pay – an employer may signal an orientation in which each party to the employment relationship focuses on the process of reaching an accommodation, involving continuous and transparent mutual reflection on a holistic deal. As Herriot and Pemberton (1995) argue, this may in turn require a ‘renegotiate or exit’ orientation on the part of the employee. But the task open to managerial initiative is one of setting clear rules of engagement and, by actions rather than words alone, communicating the potential for an employment relationship founded on mutual trust and respect. Such ‘employment alliances’ imply the scope for conflicting positions to arise between the parties – perhaps acknowledged as inevitable – with a willingness to explore the room for compromise and (possibly short-term) trade-off to secure the long-term benefits with which the partnership ideal is imbued by stakeholders. This may all sound rather esoteric: fine in principle – but what about the practice? Two examples may help illustrate issues to be weighed in considering alternatives and consequences in employer orientations towards employees. periphery to core One of the authors served on a large UK National Health Service Trust board of directors, overseeing a new hospital building project under public/private partnership commercial terms. To the great concern of employees working in support services associated with keeping the hospital running day to day (catering staff, ‘domestics’ and other ancillary workers), the project plans involved the TUPE-transfer of their employment to the new private management partner. A potentially damaging employment relations dispute was averted when the senior hospital administrators explained to groups of employees affected that, in all honesty, they would always find themselves to be peripheral workers – in effect, ‘liabilities’ or ‘second-class’ – when viewed against the Trust’s clinicians and nursing professionals. Without necessarily compromising the psychological contract they believed they had entered into in joining the NHS, they would remain members of a ‘healthcare partnership’, but enhanced by transition to ‘core workforce’ status in their new employment relationship. The implication was a basis for effort–reward bargaining where their interests were potentially advanced, not only in extrinsic reward but also in terms of scope A free sample chapter from Reward Management, 2 nd Edition by Stephen J Perkins and Geoff White Published by the CIPD. Copyright © CIPD 2011 All rights reserved; no part of this excerpt may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency. If you would like to purchase this book please visit www.cipd.co.uk/bookstore.
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